PayPal Lifts Ban on Erotic Content

March 13, 2012
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After widespread protest from free speech advocates around the nation, including CBLDF, PayPal has rescinded its overly broad threat to suspend the accounts of e-book publishers that release erotic material featuring incest, pseudo-incest, rape fantasies, bestiality (including non-human fantasy characters). Early word of PayPal’s revised policy was spread when e-book publisher Smashwords announced that they would be returning to their original terms of service, but PayPal has now made it official with an announcement on their blog.

Anju Nayar, Director of Communications for PayPal, writes the following:

Last week we posted here about PayPal’s policy concerning the use of our service for the sale of certain erotica content.  After talking with some of our affected merchants and other interested parties, we wanted to clarify exactly how we are going to implement the policy.First and foremost, we are going to focus this policy only on e-books that contain potentially illegal images, not e-books that are limited to just text. The policy will prohibit use of PayPal for the sale of e-books that contain child pornography, or e-books with text and obscene images of rape, bestiality or incest (as defined by the U.S. legal standard for obscenity: material that appeals to the prurient interest, depicts sexual conduct in a patently offensive way, and lacks serious literary, artistic, political or scientific value).

In addition, the policy will be focused on individual books, not on entire “classes” of books. Instead of demanding that e-book publishers remove all books in a category, we will provide notice to the seller of the specific e-books, if any, that we believe violate our policy.  We are working with e-book publishers on a process that will provide any affected site operator or author the opportunity to respond to and challenge a notice that an e-book violates the policy.

To be clear, we have not shut down the PayPal account of any of the e-book publishers involved in this matter.  PayPal is committed to working with publishers on a mutually acceptable process to address potentially offending books on their sites so that material with images that violate this policy cannot be purchased using our service.

Our primary interest in this matter has always been to come to a mutually agreeable solution that allows freedom of expression, while still ensuring PayPal is used in ways that fully comply with applicable laws and our policies.

I hope that this helps clarify our position.

As always, we welcome your feedback.

The American Booksellers Foundation for Free Expression and National Coalition Against Censorship, the organizations that wrote the letter that CBLDF signed, declared a victory for free speech. They announced the victory and their lingering concerns with the following press release:

PayPal Lifts Ban on Erotic Books

NEW YORK, NY, March 13, 2012 – PayPal, the dominant processor of Internet payments, today retracted its threat to close the accounts of online booksellers who sell works that include descriptions of rape, incest and bestiality.  “This decision recognizes the important principle that neither PayPal nor any other company involved in payment processing has any business telling people what they should read,” said Joan Bertin, executive director of the National Coalition Against Censorship (NCAC). NCAC joined the American Booksellers Foundation for Free Expression (ABFFE) in writing a protest letter to eBay, the owner of PayPal. “It is an important victory for free speech on the Internet,” ABFFE President Chris Finan said.

In mid-February, PayPal delivered an ultimatum to online booksellers and distributors, including Smashwords, BookStrand.com and eXcessica, giving them just days to remove all erotic books describing rape, incest and bestiality. More than 1,000 e-books were removed from the Smashwords website before PayPal agreed to postpone a final decision on cutting off payments.

NCAC and ABFFE also joined with the Electronic Frontier Foundation (EFF) to post an online joint statement that attracted co-signers from over 30 organizations representing authors, publishers, booksellers and free speech defenders. A grassroots Care2.org petition calling on PayPal to reverse the policy nearly doubled its goal of 1,000 signatures, and at least as many emails were sent to PayPal’s general counsel in support of the statement by ABFFE, EFF and NCAC.

In a statement posted on its website today, PayPal announced that in the future it will not reject e-books that consist only of text unless they “contain child pornography, or…. text and obscene images of rape, bestiality or incest (as defined by the U.S. legal standard for obscenity…)…”  It promised to limit its objections to particular books rather than rejecting “entire ‘classes.’” It also said that it is developing a process that will allow an author to challenge a PayPal notice that a book violates its policy.

The PayPal statement does not fully resolve all issues, however. It is not clear whether legal material would be affected by PayPal’s policy regarding “e-books that contain child pornography, some of which may be legal.”  Nor is it clear how PayPal proposes to focus “on individual books,” rather than classes of books, since it would be impossible to individually screen all e-books bought and sold online.

“It is too early to conclude that PayPal has completely abandoned the idea of policing the content of books purchased online,” Bertin said.  “We hope so but won’t know until the company releases a formal policy. We have to see how it is enforced.”

Visit CBLDF’s coverage on PayPal’s policy and our support of the protest here, here, here, here, here, and here.

CBLDF is proud to be among a coalition of free speech advocates, publishers, and concerned readers that helped changed PayPal’s policy. Please support our important work by making a donation or becoming a member of the CBLDF!